Missouri annual revenues up 5.8 percent

Excluding the $95.1 million received in 2004 from the U.S. Treasury pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003, state collections increased 4.9 percent.

Much of the increase came from individual income tax collections, up 6.3 percent for the year, and corporate income and franchise tax collections, up 12.6 percent.

Despite the positive growth, Missouri’s Commissioner of Administration Mike Keathley said the state cannot afford to fall back into reckless spending habits.

“There is a significant shift going on at the Capitol,” Keathley said in a news release. “We are moving away from a mentality of wasteful spending toward a new mentality of responsible budgeting and long-term planning. In addition, we are constantly looking for improved efficiencies that will help counter the careless decisions of the past.”

Though revenue was up, sales tax figures remained relatively flat, making it difficult to predict revenues for the coming year.

Sales tax and individual income tax are noted to be uncertain growth areas by The Missouri Budget Project, a nonprofit that defends low-income Missourians. Sales and use tax collections came in below the forecasted 3.8 percent increase.

“Although the revenue picture has brightened, Missouri is still left with a budget that fails to meet important needs of our citizens, especially in education and health care,” said Tom Kruckemeyer, The Missouri Budget Project’s chief economist.

Kruckemeyer also points out that 2005 is the first fiscal year to the match FY 2001 net general revenues of $6.39 billion.

“While the growth in 2005 is certainly good news for a revenue-starved state, substantial uncertainty remains heading into this year,” he said. “The shortfalls in individual income tax withholding and in sales and use tax will require improved growth … to meet forecast levels.”

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